To be precise, you'll want to clear an area extending at least 4 meters (a little more than 13 feet) away from the television. That's the back edge of the space to be taken into account by the Natal sensors. In terms of width and height, the field of vision naturally expands as it moves from the Natal device to that back edge, ending up a little more than 4 meters wide and 2.7 meters high (about 8 feet, 10 inches).

Basically you just need to stand as far back as it takes to get your whole body on the camera with about 2 or 3 inches around your body.

Eye Toy is somewhat similar depending on the game, some games only need half your body.

The package will say "Stand back 15 feet in a well lit room. Playing in dark room may cause problems. Its best to play infront of a blank wall without much decoration as that may interfear with the game."